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[2015] ZACT 80
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Accelerate Property Fund Limited and Another v Redevelopment of Fourways Mall, Fourways View and Fourways Game (LM100Aug15) [2015] ZACT 80 (6 November 2015)
COMPETITION
TRIBUNAL
OF SOUTH
AFRICA
Case
No: LM100Aug15
In
the matter between:
Accelerate
Property Fund Limited
Azrapart
Proprietary
Limited
Primary Acquiring Firms
and
The
Redevelopment of Fourways Mall,
Fourways
View
and
Fourways
Game
Primary Target Firm
Panel
: Norman Manoim (Presiding Member)
: Anton Roskam (Tribunal
Member)
: Fiona Tregenna
(Tribunal Member)
Heard
on
: 14 October 2015
Order
Issued on
: 14 October 2015
Reasons
Issued on
: 06 November
2015
Reasons
for Decision
Approval
[1]
On 14 October 2015, the Competition Tribunal ("Tribunal")
unconditionally approved the merger between the acquiring
firms
Accelerate Property Fund Limited ("Accelerate") and
Azrapart Proprietary Limited ("Azrapart") and the
target
firm which is defined as the Redevelopment of Fourways Mall, Fourways
View and Fourways Game ("the Target Properties")
.
[2]
The reasons for approving the proposed transaction follow.
Parties
to transaction
Primary
acquiring
firm
[3]
Accelerate is a property owning company with a property portfolio
comprising retail, commercial/office and industrial/warehouse
space.
Azrapart is a newly incorporated company whose primary business is to
manage the redevelopment aspects of the Target Properties
Primary
target firm
[4]
The Target Properties are retail properties comprising one major
regional centre, Fourways Mall shopping centre and two speciality
centres Fourways Game and Fourways View. The Target properties are
wholly owned and controlled by Accelerate.
Proposed
transaction and rationale
[5]
In 2013 the Target properties were sold to Accelerate. In terms of
the Sale of Agreement the Seller, Fourways Precinct retained
certain
developmental rights in respect to the unutilized land on which the
Target Properties were situated. These developmental
rights have been
ceded to Azrapart, the newly incorporated company whose primary
objective is the redevelopment of the Target Properties.
The Proposed
transaction involves an undertaking by Azrapart to redevelop the
properties. After the redevelopment is complete Accelerate
and
Azrapart will each jointly control and hold 50% of undivided shares
in the Target Properties.
[6]
The acquiring firms submit that the proposed transaction provides
Azrapart, as the developer the authority to begin construction
on the
Target Properties. Accelerate as the owner of the Target Properties
submits that the redevelopment will satisfy the requirements
of
current traders and also provides additional space for prospective
traders to enter into the
Impact
on competition
[7]
The Commission considered the activities of Azrapart and the Target
Properties and found that there was no horizontal overlap
in the
provision of rentable space in retail property. In terms of
Accelerate the Commission noted that the Target properties are
in
fact owned by Accelerate. The Commission based its investigation on
the impact of the merger in the market for retail space
in
comparative centres due to the proposed transaction resulting in the
Target Properties becoming a super-regional mall.
[8]
In its investigation, the Commission evaluated the market shares of
comparative centres within a 15km radius of the target properties.
It
found the merged entity to be within the range of 20-25% with an
accretion of less than 10% after the redevelopment is completed.
The
Commission is of the view that post-merger the merged entity will
continue to face competition from other comparative centres
such as
Mall of Africa and Sandlan City.
[9]
The Tribunal accepts that there is no overlap present in respect to
Azrapart and the Target Properties. We also find that the
redevelopment of Fourways Mall into a super-regional centre is
unlikely to substantially prevent or lessen competition in any
relevant market due to constraints of comparative centres within its
radius.
Public
interest
[10]
The merging
parties confirmed that the proposed transaction will
not result
in an
adverse
impact
on
employment.
[1]
The
proposed
transaction
further raises
no other
public interest concerns.
Conclusion
[11]
In light of the above, we conclude that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market. In addition, no public interest issues arise
from the proposed transactions. Accordingly,
we
prove the proposed transaction unconditionally.
06
November 2015
DATE
_________________________
Mr
Norman Manoim
Mr
Anton Roskam and Ms Fiona Tregenna concurring
Tribunal
Researcher:
Aneesa Ravat
For
the merging parties:
James Beall of Glyn Marais
For
the Commission:
Billy Mabatamela, Seema Nunkoo and Xolela
Nokele
[1]
Inter
alia
merger
record page 11.